Bonding Requirements

[Guest DuChamp]

Facts: A small plan has 1,500,000 in total assets. The plan has a non-qualifying real estate investment of 300,000, thus the plan consists of 20% non-qualifying assets.

What is the appropriate bonding amount for this plan for both the small plan audit waiver and the general 412 bonding requirements?

Would it be just a single bond covering $300,000? (Just the bond requirement for the small plan wavier, ignoring the 10% 412 requirement since the $300,000 is in excess of the 10% 412 amount)

Would it be $450,000 = $300,000 + $150,000 (The bond requirement for the small plan waiver, plus the 10% 412 bond requirement)?

Would it be $420,000 = $300,000 + $120,000 (The bond requirement for the small plan waiver, plus 10% on plan assets that are qualifying plan assets)?

Am I over-thinking this? My gut says the $300,000 would be the appropriate bonding amount.

[BG5150]

$300,000